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Thiesse’s Thoughts

Harvest Update Heavy rains in some areas this past weekend have created very wet field conditions and have slowed harvest in many areas of southern Minnesota and northern Iowa. However, prior to the weekend, a very nice weather pattern during the last week of September with temperatures 10-20° above normal across the upper Midwest allowed for rapid progress on soybean harvest in many portions of the region. As of October 1, some areas of the region are reporting over 75% of the soybeans harvested, while other areas are reporting less than 25%. In areas with extremely wet field conditions, such as in some parts of southern Minnesota and northern Iowa, completing soybean harvest may be somewhat of a challenge in the coming days and weeks. Typically in October, field conditions are slow to dry out after excessive rainfall, due to lower moisture evaporation rates with shorter day length and very little moisture used by plants. At the same time, mature soybeans dry out very fast in sunny conditions, which could lead to greater field loss if the soybeans cannot be harvested on a timely basis. Soybean yield results in 2007 have been quite variable, due to the amount and timing of summer rainfalls, ranging from 30-60 bu./acre.

Some farm operators in many areas of south-central Minnesota have also started harvesting corn. Again, the early corn yield reports have been quite variable; however, in many cases, the 2007 corn yields have been better than expected, given the very dry weather pattern that existed in many areas this past summer. Most growers plan to leave the corn in field as long as possible before combining to allow maximum natural dry-down in the field, in order to reduce corn drying costs. Most corn in south-central Minnesota has now reached physiological maturity, or black-layer, and is now being reported at 15-19% moisture. Corn must be dried to approximately 15% moisture for safe storage in on-farm grain bins until the spring or summer of 2008.

DCP Direct Payments Eligible producers will receive the second portion of their 2007 DCP direct payment after October 1, 2007. The second portion of the direct payment will be 78% of the total direct payment for 2007, if a producer chose to receive an advance direct payment (22% of total) in December 2006 or January 2007. If a producer elected not to receive an advance payment, they will receive the entire direct payment in October 2007. The DCP direct payment rates for 2007 are 28¢/bu. for corn, 44¢/bu. for soybeans and 52¢/bu. for wheat. The direct payments are based on 85% of the crop base acres times the long-term base yield on a particular farm, and are not based on actual crop acres or crop yields for 2007. Under current USDA farm programs, direct payments are guaranteed regardless of crop commodity prices.

No advance DCP direct payments have been announced at this time for the 2008 crop year. Any advance direct payments for the 2008 crop year will be dependent on a new farm bill being passed by Congress and signed by President Bush, or if the current farm bill is extended for 2008. Currently, the U.S. House has passed their version of a new farm bill, which would essentially leave direct payment provisions – including advance payments and payment rates for corn, soybeans and wheat – the same as current direct payment rates and provisions. Leadership at USDA has also called for continuation of direct payments similar to the current farm program format. However, the U.S. Senate has not yet passed their version of a new farm bill. Some in the U.S. Senate would like to reduce direct payment rates, eliminate advance payments or eliminate direct payments all together. We will have to watch how the new farm bill develops in the coming weeks and months to know whether or not we will receive advance payments, or any direct payments at all, for the 2008 crop year.

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at [email protected].